Zebra Technologies upgraded to Buy at Credit Suisse ahead of 1Q release

Credit Suisse upgraded Zebra Technologies Corporation (NASDAQ:) to an Outperform rating (from Neutral) and raised their price target on the stock to $326.00 (from $311.00) ahead of the mobile computing company’s 1Q23 earnings release.

ZBRA is scheduled to report results on Tuesday, May 2nd. Driven by strength in the EMEA region, and better FX, Credit Suisse raised FY23 EPS estimates by 14c to $17.70 which is 1% ahead of Consensus.

EMEA accounts for 33% of revenues, based on channel checks, Credit Suisse expects 1Q underlying growth (ex-Ukraine/Russia) in the region to be MSD-HSD.

Analysts wrote in a note, “Zebra is due to report Q1-23 earnings at 6.30am on May 2nd, with the conference call scheduled for 8.30am. Driven by Europe, we believe revenues and EPS will be ahead of consensus and above the top of the range of guidance. We expect Q2-23 EPS guidance above consensus. Given improving FX and stronger EMEA region, we believe ZBRA could raise its full-year revenue guidance by 1.5points (+1pt FX, 0.5pts organic growth). We now believe FX will be neutral for full-year 2023 with M&A adding 50bps to revenue. We do not expect ZBRA to change its FY23 22-23% EBITDA margin guidance at Q1 but see potential for guide to the mid-point of that range later in the year due to improving supply chain headwinds, and FX.”

Credit Suisse raised Q1-23 adjusted EPS estimates 14c to $4.04 (compared to guidance of $3.70-$4.00), +3% above $3.92 consensus, and flat organic growth (consensus -1%). The analysts expect Q2 adjusted EPS guidance of $4.10-4.40 ($4.25 mid-point), +2% above $4.17 consensus. They expect ZBRA to raise its FY23 revenue guidance by 1.5% (+1pt FX, +0.5pt. organic).

Shares of ZBRA are down 0.58% in afternoon trading on Tuesday.